BHP Billiton might use Pacific Hydro’s geothermal energy to power a project at nearby Olympic Dam, but Weaven says that “to make all these geothermal projects really nation building you would have to connect them to the Eastern Seaboard power grid”. “If you had all this power from Geodynamics and traditional geothermal sources coming down that channel, the amount of subsidy you would need to create transmission lines might be quite small.” However, he argues that governments would need to play a crucial role, providing guarantees that whichever investors bore the initial burden of building the transmission lines would be fairly compensated by new users of the lines in the future.

The supply-side of Australia’s power infrastructure is not the only facet where super funds could find nation-building investments, according to one of Weaven’s fellow panellists at the CMSF plenary, Frank Muller of the UNSW Climate Change Centre. “The whole way we think about infrastructure needs to change. A lot of the attention is given to coal and gas and their alternatives on the demand side, whereas a lot of gains are to be made from improving end-user efficiency. From the power plant to your fridge at home, it’s all part of one physically connected system,” Muller says. “At this stage probably the biggest difference super funds can make is in their commercial property portfolios.

The traditional approach to direct property was very much ‘we don’t have to work in the building, we don’t have to pay the power bill so who cares’, but I think industry funds in particular have helped turn that around. “Those institutions are often not so disconnected from the people building their building and tenanting them, and apart from that it’s much more common now for people to want to let a green-rated building.

It’s much cheaper to build an efficient building in the first place than buy carbon offsets.” Muller would also like to see more institutional investment to increase supply of renewable energy sources, and says Australia needs to learn from missed opportunities in the past. “There are renewable energy opportunities where Australia has some definite advantages, but with something like solar photovoltaic cells, we saw the technology developed here but commercialised in the US. I wouldn’t blame a lack of venture capitalist spirit for that – I would blame a lack of government policy around renewable energy.” He hopes the signing of the Kyoto Protocol and the arrival of a national carbon trading scheme will help give institutional investors the reassurance they need to take the risk of commercialising such new technologies.